The Philippine Stock Exchange Index (PSEi) snapped a three-day losing streak on Monday, rising 0.53 percent to 5,799.32, while the peso weakened sharply to P61.74 per US dollar from P61.59 previously, as equities rallied on improving economic data and oversold conditions while currency markets remained dominated by global risk sentiment.

Investors returned to selectively buy beaten-down stocks following last week’s sharp market decline. Sentiment was further supported by an improvement in domestic manufacturing activity, with the S&P Global Philippines Manufacturing PMI rising to 50.8 in May from 48.3 in April, signaling a return to expansion and easing concerns over weakening economic growth.

Trading was relatively active, with value turnover reaching P7.14 billion, above the year-to-date average. Foreign investors, however, remained net sellers, posting P1.13 billion in net outflows.

Sector performance was mixed. Services led the advance, rising 2.47 percent on the back of gains in International Container Terminal Services Inc. (ICTSI), which climbed 3.65 percent to P780 per share. Mining and Oil was the biggest laggard, falling 0.97 percent as commodity-related stocks surrendered some of their recent gains. Converge ICT Solutions Inc. (CNVRG) was the session’s worst performer, declining 6.55 percent to P10.28.

While equity investors focused on improving domestic economic indicators, currency traders remained more concerned about geopolitical risks and the inflationary implications of higher oil prices.

The peso weakened sharply, closing at P61.746 per US dollar from P61.59 on Friday, moving dangerously close to the record low of P61.75 posted on 18 May.

The move represented a depreciation of about 15.6 centavos, or 0.25 percent, in a single session. Data from the Bankers Association of the Philippines showed the currency opened significantly weaker at P61.65 compared with Friday’s P61.42, traded within a P61.65-to-P61.75 range, and failed to recover throughout the day, indicating sustained demand for the US dollar.

Demand for the greenback strengthened after renewed military tensions between the United States and Iran increased risk aversion across global markets. Reports indicated that the two countries exchanged strikes again at the start of the week, reviving geopolitical uncertainty just as both sides had appeared close to reaching a peace agreement.

The peso’s decline also mirrored broader weakness across regional currencies. Several Asian currencies softened against the dollar as investors reduced exposure to emerging-market assets and shifted toward safe-haven holdings.

Unlike the PSEi, which was supported by bargain hunting and stronger manufacturing data, the foreign exchange market remained focused on external risks, pushing the peso back toward record-low territory.